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Presidential Debate of October 3, 2012: AHA Roundtable

Factual Misrepresentations of History

Peter H. Lindert, October 2012

The parameters of the first debate protected both candidates from blundering. Both sides had invested several days and millions of dollars into avoiding unscripted pitfalls, and they succeeded. They were protected by the format as well, since Jim Lehrer’s predictability posed none of the risks of a town hall debate.

Our task for the AHA panel is to offer broader context to the debate, and also to identify factual misrepresentations of history.

Missing Context

In this particular debate there was little reference to history, either American or global. One could not tell from the debate, for example, that economic inequality is higher in this country than in other industrialized countries, or that inequality has soared since the 1970s.

A serious constraint on any U.S. presidential debate is the unspoken patriotic ban on saying that this country can learn any positive lessons from other countries. The greatest relevance of this omission in the October 3 debate came when Governor Romney said America has “the best health care record in the world.” Comparative studies find that at least some part of this country’s lower life expectancy is due to our comparatively poor delivery of care for those under 65. One could say that we have the best top-dollar care, as in the case of the Mayo Clinic to which Governor Romney referred. But in the overall delivery of health care, the World Health Organization in the late 1990s ranked the United States 37th.

The closest the debate got to this issue was when President Obama correctly said that government provides health insurance with less bureaucratic administrative cost than private insurance.

Misrepresentations of History

There were ways in which history was misstated and, as one might expect, the more aggressive candidate unleashing more firepower had the edge both in scoring political hits and in scoring factual misses. Romney successfully obfuscated by denying some very recent history, i.e., his campaign stances to date. As of October 3 he now favors government regulation, opposes cutting education spending, and opposes cutting the tax share paid by the rich.

On taxes for high incomes, in particular, Romney first said “I will not reduce the taxes on high-income Americans.” That would contradict his campaign statements, unless he meant only that he would retain the Bush tax cuts. Later, however, he introduced a different “principle,” one that history more clearly contradicts: “My - my number-one principle is, there will be no tax cut that adds to the deficit. I want to underline that: no tax cut that adds to the deficit.” This seems to hark back to the 1970s Laffer curve argument that tax cuts do not add to deficits because they stimulate the economy strongly enough to raise tax revenues. Yet the Reagan tax cut of 1981 caused a massive budget deficit, one so big that the Reagan administration raised tax rates the following year in order to cut the deficit. Economists, including conservatives, have rejected this argument ever since. In 2011, 93 percent of economist experts chosen by the Chicago Business School agreed that raising taxes, not lowering them, would raise revenue.

Ninety percent of those experts further agreed that either cutting taxes or raising government expenditures do stimulate the economy. That means that the stimulus package probably played some role in preventing the Great Recession from matching the Great Depression. Yet it also means that cutting taxes (or raising government spending) does worsen the deficit.

Given that economists agree that government spending could be stimulative in a recession (an untouched issue), the question is why President Obama did not enact more stimulus. The answer lies on Capitol Hill: Congressional Republicans have filibustered or defeated several public jobs bills, such as his American Jobs Act. President Obama did not say so, and cannot, lest it cast doubt on his ability to lead bipartisan solutions over the next four years.

Peter H. Lindert is Distinguished Research Professor of Economics at the University of California, Davis.